Review of specialized legal opinion on violation of the Fair Trade Act related to inter-company transfers.

Veat Law Firm Startup Advisory Team conducted a review regarding the potential legal sanctions for the act of transferring employees from a competitor after a departing employee transferred to a competitor and enticing current employees. Veat Law Firm Startup Advisory Team analyzed various aspects, including whether the act constituted an unfair competitive practice under the “Act on Distribution and Fair Trade” (hereinafter referred to as the “Fair Trade Act”) and the “Act on Prevention of Unfair Competition and Protection of Trade Secrets,” particularly concerning the application of the “Trade Secret Infringement and Restriction of Employment” provisions within the “Unfair Competition Prevention Act.” Specifically, they sought solutions that wouldn’t infringe on freedom of choice in employment while protecting the legitimate interests of the company. Veat Law Firm Startup Advisory Team provided detailed analysis based on specific case examples and judicial precedents through the “Guidelines for Review of Unfair Trade Practices” provided by the Fair Trade Act and offered guidance to the company to clearly understand potential legal risks it might face and prepare for inevitable legal disputes. Furthermore, Veat Law Firm Startup Advisory Team meticulously reviewed the content of contracts and agreements with employees, including those who were or are currently employed or have retired, to deeply analyze the legality and feasibility of the restriction of employment. As a critical consideration for protecting trade secrets and preventing personnel outflow, especially for startups where talented individuals are core assets, this point is particularly important. “[Act on Distribution and Fair Trade] Types or Criteria for Unfair Trade Practices” ① Business operators shall not engage in acts that, to the extent that they impair fair trading or cause another business operator to engage in such acts (hereinafter referred to as “unfair trade practices”), or cause another business operator to engage in such acts. (Article 45(1) of the Act on Distribution and Fair Trade) The types or criteria for unfair trade practices as stipulated in Article 45(1) of the Act on Distribution and Fair Trade are shown in Exhibit 2. 8. Acts that unduly obstruct the business activities of another business operator (Article 45(1)(8) of the Act on Distribution and Fair Trade) Acts that unduly obstruct the business activities of another business operator shall be considered as follows: na. Improper recruitment of personnel Acts of improperly recruiting personnel from another business operator to a degree that seriously obstructs the business activities of that other business operator. (Article 52 of the Enforcement Decree of the Act on Distribution and Fair Trade) The “Act on Distribution and Fair Trade” and the “Enforcement Decree of the Act on Distribution and Fair Trade” clearly and specifically define unfair trade practices, and the “Guidelines for Review of Unfair Trade Practices” stipulates that when personnel are improperly recruited and employed, it is prohibited because it can hinder fair competition by impairing price and quality competition and service competition. The “Guidelines for Review of Unfair Trade Practices” specifically identify types and criteria for unfair trade practices, along with criteria for identifying violations of the law, to ensure businesses comply with the law. Veat Law Firm Startup Advisory Team understands the difficulties companies face when resolving complex and specialized legal issues and provides tailored legal advice based on the situation of each company, helping companies grow stably and maintain competitiveness. Veat Law Firm Startup Advisory Team provides effective legal advice based on the “Act on Distribution and Fair Trade” and the Fair Trade Commission’s guidelines, considering the conditions of establishment, the degree of difficulty in business activities, and the target actions. If you have any inquiries regarding transfers of employment, prohibitions on concurrent employment or competitive employment, or other related matters regarding unfair trade practices, please contact Veat Law Firm. To support the growth and development of startups, Veat Law Firm strives to be a reliable partner, turning challenges into opportunities. For more details, please refer to the service guide below. Thank you. Veat Law Firm.